Henry Hub spot price hits highest level since May

Natural gas prices posted a slight overall increase during the report week (Wednesday, June 11 – Wednesday, June 18) at most market locations, as temperatures warmed, increasing demand for natural gas that is consumed for electric generation (power burn). The Henry Hub spot price rose from $4.50/MMBtu last Wednesday to $4.70/MMBtu yesterday, its highest level since early May.

At the New York Mercantile Exchange (Nymex) the price of the front-month (July 2014) contract rose from $4.508/MMBtu last Wednesday to $4.659/MMBtu yesterday. The price of the 12-month strip also rose, from $4.448/MMBtu last Wednesday to $4.579/MMBtu yesterday.

Working natural gas in storage rose to 1,719 Bcf as of Friday, June 13, according to the U.S. Energy Information Administration (EIA) Weekly Natural Gas Storage Report (WNGSR). A net increase in storage of 113 Bcf for the week resulted in storage levels 29.1% below year-ago levels and 33.1% below the 5-year average.

The Baker Hughes rotary rig count decreased by 6 for the second week in a row, to 1,854 as of June 13. The number of active gas-directed rigs fell by 10. An increase of 3 gas-directed rigs in the Marcellus Shale only partially offset a decrease of 3 rigs in the Granite Wash Shale in Texas and Oklahoma and a decrease of 10 rigs in the rest of the United States. The total number of U.S. oil-directed rigs rose by 6. There was an increase of 8 oil-directed rigs in the Permian Basin in West Texas and eastern New Mexico, 6 oil-directed rigs in the Niobrara Shale in Colorado and Wyoming, and 6 oil-directed rigs in Granite Wash. This was only partially offset by a decrease of 4 oil-directed rigs in the Williston Basin, which includes the Bakken Shale, and 10 oil-directed rigs in the rest of the United States.

The Mont Belvieu natural gas plant liquids composite price partially recovered from last week's decrease, rising by 10 cents to $9.84/MMBtu for the week covering June 9 to June 13. After decreasing last week, the price for natural gasoline, propane, butane and isobutane all rose this week, by 3.2%, 1.0%, 0.1%, and 0.6%, respectively. The ethane spot price spot price decreased by 1.6%, after increasing last week.